PROJ01880

• Contract/PO #: C150165
• Contractor Name: Lower Platte and Beaver Canal Company
• Contract Type: Loan
• Water District: 1
• County: Morgan
• Loan Projects - Doc Type: Approval Letter

Lower Platte and Beaver Canal Company Agenda Item 14;a.
January 27-28,2004 (Updated February 2, 2004)

99.4% of the LPSCC shares, and 0.6% of the shares are owned by municipal low-income
entities. The blended interest rate would be 2.5%; equal to the CWCS agricultural rate.)

Table 1 is a summary of the financial aspects of the project. A CWCS Loan of $310,500 would
have an annual payment of $16,318 (including the 10% reserve requirement) at the loan terms
of 2.5% for 30 years. This represents $0.44 per acre-foot, based on average canal diversions of
36,980 acre-feet. The LPSCC will fund their 10% cost share from 2004 assessments. The
Company will also use its existing Sank line of credit to finance the project, until the CWCS loan
becomes available.

a Ie 1. Financi.:ll Summary
Project Cost $345,000
Number of Shareholders 90
Number of Shares of Stock 1476
CWCS Loan Amount $310,500
CWCS Loan Pavment (includes 10% reserve) $16,318
Current Assessment per share $65
New Assessments oer share (with CWCS loan + O&M of $75,000) $127
Annual Loan Cost per acre-foot (Averaae diversions: 36,980 acre-feet.) $0.44

T b

Credit worthiness: The LPSCC has no existing long-term debt. Table 2 shows the Financial
Ratios for the LPSCC and indicates, with the exception of cash reserves, average to strong
ability to repay the new $310,500 CWCS loan with the project in place. (Note: Shareholders of
the LPSCC previously were members of GASP and paid a total of about $119,000 per year for
augmentation of their wells. These GASP dues can now be used to help pay assessments of
the LPSCC.)

Financial Ratio Without With
the Droiect the Droiect
Operating Ratio (revenue/expense) 105% 101%
weak: less than 100% (average) (average)
average: 100% - 120%
strano: areater than 120%
Debt Service Coverage Ratio No long-term debt 120%
(revenues-expenses)/debt service I[strong) (average)
weak: less than 100%
average: 100% - 125%
strano: areater than 125%
Cash Reserves to Current Expense ~25% 14%
weak: less than 50% (weak) (weak)
average: 50% - 100%
strana: a reater than 1 00%
Annual Cost per Acre-Foot (51,980 AF total) ~) 1.62 $4.07
Weak: greater than $20 (strong) (strong)
average: $10 - $20
strano: less than $10

Table 2. Financiial Ratios

3

As security for the loan the LPSCC will pledge assessment revenues backed by assessment
covenant and key portions of the project (the recharge well, the Company's interest in the
pipeline, the perpetual easements upon which the we~1I and pipeline are located, and 2 key
recharge sites and deeded land upon which they are located.) This security is in compliance
with CWCS Loan Policy No.5 (Collateral).

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